Investing.com — Most Asian stocks fell Friday as markets gauged hawkish comments from the Bank of Japan and mixed Japanese inflation data, with the focus shifting squarely to an upcoming speech from the Federal Reserve chairman.
Regional markets took a weak lead from Wall Street as a recovery in Treasury yields and a sharp decline in sales of technology stocks led to steep losses.
US stock index futures rose in Asian trading, with all eyes on a speech at the Jackson Hole Symposium later on Friday.
Powell’s speech comes amid growing belief that the Fed will cut rates in September. But signs of a rapidly cooling labor market also fueled concerns about a slowdown in the US economy, causing risk appetite to cool this week.
Japanese stocks fall on aggressive BOJ talk and mixed CPI
The Japanese index and the index each fell about 0.2%, with both indexes heading for a mediocre end to the week as the recovery from early August losses stalled.
BOJ Governor Kazuo Ueda said at a parliamentary hearing that he still views interest rates as very low and that they need to rise further to reach a neutral level. Ueda also reiterated plans to raise interest rates further if inflation remained stable. His comments came after the BOJ raised rates at a meeting in late July.
But Ueda’s comments were somewhat undermined by the mixed Consumer Price Index inflation data for July. The results showed that inflation rose due to better consumer spending and higher wages.
But underlying inflation – which excludes food and energy costs and is a key inflation measure for the BOJ – fell below the bank’s annual target of 2%.
The reading raised some doubts about how much leeway the BOJ has to keep raising rates.
Japanese markets were rocked by a hawkish BOJ earlier in August, although they made up for much of their last week.
Asian stocks weak, tech follows losses on Wall St
Broader Asian markets were largely lower and set for a mediocre weekly performance as the recovery from early August losses stalled.
Technology indices saw relatively larger losses, tracking the losses of their US counterparts, as expectations of market peer NVIDIA Corporation’s (NASDAQ:) earnings expected next week also led to caution.
South Korea’s index fell 0.5%, while Hong Kong’s index lost 0.9% due to losses in major Chinese internet stocks.
Chinese shares remained near six-month lows, with the en indexes moving from flat to low on Friday. The two were also on track for a 1% decline this week.
The Australian index fell 0.3%, while futures for the Indian index pointed to a slightly positive open, although the index is expected to face resistance at the 25,000 level.
